Should You Give Your Grad an Allowance?

By DailyWorth Team

June 15, 2012

Put yourself in the recent grad’s ballet flats: You’re 22, living with your parents after four years of freedom, stuck watching golf with Dad and trying to sneak in quietly at 2 A.M. after a night out. It's like high school all over again, but not.

The (jobless) boomerang kid still needs to live her life—and for that, she’ll need an allowance. And in fact, 34% of adults aged 18 to 24 get some parental help. Here’s how to work it out.

First: Only dole out what you can afford. Your kid’s allowance should be part of your budget—and it should never cut into retirement savings.

Work out what your kid needs to cover her costs (cell plan, date nights, gas). Stick to that amount, say Phyllis Goldberg, Ph.D. and Rosemary Lichtman, Ph.D., consultants in family dynamics and founders of HerMentorCenter.com. You want to be supportive, but not limit her incentive to work, save, and move out.

As for you, grads: This isn’t like the allowance you got when you were kids. Talk to your parents about how you fit into the bigger picture of your family’s finances.

And if the job hunt drags on, find ways to bring in some cash (even if it means dog-walking, housepainting, babysitting). You’ll feel productive—and your parents will appreciate the help.